Canopy Growth Stock Trading Lower On $150M Registered Direct Offering

Canopy Growth Corporation WEED CGC has entered into an agreement with an institutional investor for the purchase and sale of up to $150 million aggregate principal amount of senior unsecured convertible debentures.

Pursuant to the terms of the agreement, the institutional investor purchased an initial $100 million of the convertible debentures and an additional $50 million of the convertible debentures will be purchased in the event that certain conditions outlined in the indenture are satisfied or waived. As further described below, no cash will be payable by Canopy Growth in any circumstances in respect of principal, interest or any other amounts owing pursuant to the terms of the convertible debentures.

The convertible debentures were sold at $1,000 per convertible debenture and bear interest at a rate of 5.0% per annum, payable in common shares at the earlier of the time of conversion of the convertible debentures or February 28, 2028.

The convertible debentures are convertible into common shares at the option of the institutional investor at a conversion price equal to 92.5% of the three-day volume-weighted average price of the common shares ending on the trading day prior to conversion. On the maturity date, the principal amount of the convertible debentures, including any accrued but unpaid interest, will also be paid in common shares.

The company intends to use the proceeds from the offering for working capital and general corporate purposes.

Price Action

Canopy Growth shares were trading 6.37% lower at $2.35 per share during Tuesday’s pre-market session.

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